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Bitcoin used to buy real estate

Bitcoin used to buy real estate in the U.S. and internationally in 2018. However, despite its popularity in late 2017 and early 2018, it remains controversial.

Forbes, in March of 2018 declared that Bitcoin and all other cryptocurrencies should be shut down. In addition, CNBC recently (October 2018) aired a show titled Bitcoin: Boom or Bust focusing on its controversy.

Yet, Bitcoin continues to trade. On October 17, 2018, Bloomberg reported that Bitcoin trades at $300.  

 

Bitcoin Used to Buy Real Estate in California

 

In 2014, The Wall Street Journal reported that a Lake Tahoe, California 1.4 acre tract of land sold for $1.6 million using 2,739 Bitcoins. This was the first time Bitcoin used to buy real estate in the U.S.

In spite of all the controversy surrounding Bitcoin, it continues to operate. Last May, Forbes reported that even in 2018, Bitcoin real estate property listings in the U.S. continue. Currently, a 27-acre tract of Silicon Valley land lists at $16 million in Bitcoins.

Another recent Forbes article described how the San Diego investment firm, Canter Companies, listed two multi-million dollar mansions in Bitcoins. Both homes total $19.8 million in Bitcoins. One of the mansions owned by Alan Ezier the founder of Circle Square Capital lists for $8 million in Bitcoin.  

The Los Angeles Times reported last March that, “L.A.’s real estate industry enters the age of bitcoin”.

 

How to Find U.S. Properties Selling for Bitcoin

 

Several sites list real properties nationwide where purchasing with Bitcoin exists. One such site called Open Listings makes it easy with a search tool allowing you to search the keywords “bitcoin” and even “ethereum”.

 

How Bitcoin Pays for U.S. Real Estate

 

According to The Wall Street Journal (WSJ) in the news story mentioned above, the Lake Tahoe property used a company called BitPay, a Dutch company which converts Bitcoin into dollars because the seller demanded payment in U.S. dollars. WSJ also reported that BitPay handled other U.S. real estate transactions.

 

History of Bitcoin Real Estate Sales in the U.S.

 

As mentioned above, the first sale of land in the U.S. using Bitcoin occurred in 2014 in Lake Tahoe.

The first sale of a U.S. home in Bitcoin occurred in 2017. Sotheby’s International Realty sold the first home in Austin, Texas using Bitcoin. However, Bitcoin prices were $3,400 in September of 2017.

In January of 2018, Florida’s Real Estate Daily reported the “first cryptocurrency-only real estate transaction in South Florida”. The sale involved a Miami two-bedroom condo for 17.74 Bitcoins (around $275,000).

Business Insider reported in March of 2018 that “Homeowners across America are trying to sell their million-dollar homes for Bitcoin”.

 

Bitcoin Also Used for International Real Estate Purchases

 

In 2017, Bitcoin real estate transactions occurred in Panama.

In 2018, Chinese millionaires use Bitcoin to purchase real estate in several countries. One such purchase occurred in Los Gatos, just a 90-minute drive from San Francisco. A 100,000 square foot mansion purchased by a Chinese millionaire using 500 Bitcoin. Although not used directly, the Bitcoin was sold in the U.S. for the dollars used towards the purchase.

U.S. crypto real estate company called Slice claims that one-third of their clients include Asian buyers using a Hong Kong securities brokerage to leverage their Bitcoins in the U.S.

The South China Morning Post reports Hong Kong as very popular for Chinese and other Asian millionaires to buy Bitcoin and invest in foreign real estate. That’s because Hong Kong levies lower taxes and require less documentation than China and other Asian countries.

According to Natalia Karayaneva, CEO of Propy, a global real estate marketplace, more of her international clients use cryptocurrencies for real estate purchases. Her company recently brokered a $4 million purchase in the Silicon Valley using cryptocurrency.  

Karayaneva claims: “We’re seeing that more and more people are willing to buy properties with cryptocurrencies because it’s getting easier to get their money out of the country using Bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels.” Source

 

International Crypto Hubs

 

Karayaneva also points out that the U.S. and the U.K. are the most popular real estate locations, especially in the San Francisco Bay Area and London. She states: “They were mostly interested in residential properties next to good education, like Stanford,” she said. “Also, they want to diversify. They want to have parts of their assets abroad in more stable countries.” Source

Her claims backed up by ATTOM Data Solutions, reveals immense popularity in purchasing California single-family homes over the past 10 years. Currently, numerous California single-family homes are purchased with all cash without a mortgage. This makes the usage of Bitcoin easier.

CEO Roy Dekel at SetSchedule, a California real estate leads for agents platform, also supports Ms. Karayaneva. Mr. Dekel points out that Chinese Bitcoin investors quickly convert into U.S. dollars in order to purchase real estate. He claims that Los Angeles and San Francisco properties are very popular markets for the “ultra-wealthy Chinese” to diversify their investment portfolios.

The reason for high interest from wealthy Chinese in California and other U.S. real properties is based on China’s recent unpredictable trends. According to a story in The New York Times last January, “China’s Housing Market is Like a Casino”. Prices fluctuate like “crazy”. Over the past year, Beijing experienced a 40% rise in prices. However, Reuters reported last June that over the previous six months property investments diminished.

This encourages Chinese to actively invest in international real estate markets due to the instability at home.

 

Conclusion

 

Bitcoin used to buy real estate as explained here remains a viable option for purchases in California and nationwide. A surprising number of high-end real estate sales in Bitcoin continue to occur across the U.S. in 2018.

Many wealthy Chinese investors use Bitcoin for their real estate purchases in California and in other states. Hong Kong brokerages facilitate Chinese and other Asian investors using Bitcoin to buy real estate in the U.S.

San Francisco and Los Angeles real properties appear most popular with Chinese using Bitcoin for their purchases.

Some sellers accept Bitcoin while others demand cash. Companies like BitPay convert Bitcoin into U.S. dollars for the purchase.

Therefore, if a buyer approaches you with Bitcoin to make their purchases in California, don’t turn them away. Find out if the seller accepts Bitcoin or another cryptocurrency. If not, contact a company which converts Bitcoin into U.S. dollars to complete the transaction.

Steven Rich, MBA – Guest Blogger

 

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